Despite fashion retailer Next seeing a 5% rise in full year profits for the 12 months to January 2016, the head of the company is anticipating the “toughest year since 2008” as it slashes its profit estimates.
Figures show that pre-tax profits increased to £821.3 million which is a 4.8% rise compared with the previous year. Sales increased 3.7% to £4.03 billion, while the retail division sales increased 1.1% to £2.37 billion with profits reaching £402.1 million.
Commenting, chief executive Lord Wolfson, said: “The outlook for consumer spending does not look as benign as it was at this time last year…although employment rates are at record highs, growth in real earnings slowed markedly from September.”
He added “The year ahead may well be the toughest we have faced since 2008. In many ways we have more to do than ever before with complex challenges to our working practices across product, marketing and systems.
"It may well feel like walking up the down escalator, with a great deal of effort required to standstill. It will not be the first time we have felt this way, and our experience is that the effort put into improving the business in tough times can pay handsome rewards when conditions improve."
Next chairman, Jon Barton, added: “2016 will be a challenging year with much uncertainty in the global economy. For Next it makes it particularly important that we remain focused on our core strategy… investing in the business, improving the design and quality of our products and returning surplus cash to shareholders.”
Next has predicted that this year’s profits will range from £784 million to £858million.
